Swiss-Belhotel International has got ambitious plans for expansion in India. The top team from the region will be in India next week led by Mr. Gavin M. Faull, Chairman and President of Swiss-Belhotel International to explore opportunities.
Mr. Faull, said, “India is a very significant market for us and establishing a presence in the country is part of our global expansion strategy. We are in discussions with a number of owners and developers about opportunities across India and will be visiting various locations next week”.
The Indian hotel industry is currently highly fragmented with a large number of small and local players accounting for bulk of the share. International hotel chains are expected to hold 50 per cent share in the Indian hospitality industry by 2022, from the current 44 per cent.
Mr Laurent A. Voivenel, Swiss-Belhotel International’s Senior Vice President, Operations and Development for the Middle East, Africa and India, said, “Although around 89,500 additional rooms are expected to come up in India in the next five years, the supply of branded/quality rooms in India is much lower compared to other countries across the globe. Only a little over 37,500 branded rooms will be developed by 2020/21 taking the total supply to 151,324. Hence, there exists a huge potential for operators such as us across all the segments of hotel industry in India with 14 trusted brands.”
Most of the expansion in India’s hotel market is taking place in the mid to upscale segments of the market due to growing middle class, stronger domestic demand, tax reforms and stabilization of supply and demand chain. Swiss-Belhotel International is the perfect fit for the market with 57% of the group’s global portfolio of 145 hotels in 4 to 5 star segment.
International hotel operators are eager to expand in India because of the country’s growing wealth and burgeoning travel market amid a population of more than 1.3 billion. India is projected to be the world’s most populous country by 2022, surpassing China, with its population reaching 1.7 billion by 2050. However, there has been a bit of a pipeline shortfall in the last three years because of the economic constraints.
Mr Voivenel stressed, “It is an exciting time to enter India. Countrywide hotel markets are performing at an all-time high with ADRs ranging between INR 4,200 to 7,900 and occupancy ranging between 54 to 75%. Hotel markets are clocking nearly 12% higher room revenue over 2015, which in itself witnessed nearly 11% higher room revenue growth over 2014. The hotel markets are expected to see strong performance growth in the short-to-medium term, given the new hotel supply in the country slowing to 3 to 4% (y-o-y) over the next 3-5 years – from a high of 6 to 8% over the past five years – and the return of growth of India’s macro-economic indicators.”
According to industry reports, the owned inventories of the top 15 companies account for almost 34% of the existing branded supply. Tier I cities, primarily Mumbai and Delhi, continue to be the most preferred locations for expansion. However, more and more hospitality players are now willing to invest in Tier II and III cities to capitalise on the growth of domestic travel that has resulted in these markets outperforming the more mature and established commercial hotel markets.
India has moved up 13 positions to 52nd rank from 65th in Tourism & Travel competitive index. By 2030, the country is expected to move up five spots to be ranked among the top five business travel market globally, as business travel spending in the country is expected to treble until 2030 from US$ 30 billion in 2015. India is also projected to be the fastest growing nation in the wellness tourism sector in the next five years, clocking over 20 per cent gains annually through 2017.